Brigade Enterprises to double revenue from home sales in 3 years

BENGALURU: Realty firm, Brigade Enterprises is expected to double its revenue from the residential segment driven by new launches and robust sales across all its projects over the next three years, said the company. The company expect to growth at 30-35 percent in the coming year with annual revenue recognition of Rs 1,900 crore from residential portfolio alone.

"Brigade has already sold 7 million sft valued at Rs 3200 crore and has realised only Rs 1700 crore so far," said Suresh Kris, CFO of the company. "We expects residential segment to contribute around 80% to the company's revenue in coming years," he added.

The Bengaluru-based real estate firm sold a total of 2.80 million sq. ft of real estate space with an aggregate value of Rs.1421 crore in FY 2015, doubling it from FY14 when the residential segment contributed Rs 654 crore to the company's revenue.

"The company has over 17mn sft of assets under construction valued at RS 7,000 crore which are expected to be completed in the next 2-3 years," said Kris. The South India based developer with operations concentrated primarily in Bengaluru along with other cities like Hyderabad, Mysore, Chennai and Kochi.

According to Dolat Capital, the company has been able to maintain its strong sales velocity with a CAGR of 28% over FY12-14 in area sold.

"Brigade sold about 2.6mn sq ft in FY14 despite steady sector specific challenges in terms of long clearance cycles, weak demand in FY13/14 due to uncertainty on central government/economy and modest hiring in IT sector over the same period," says Abhishek Lodhiya in its latest report.

Edelweiss Securities in the latest report said, " While expanding its scale of operations in the development property business and building strong rent yielding assets, Brigade has managed cash flows prudently, maintaining comfortable debt to equity at 0.7x without diluting equity," Aashiesh Agarwaal an analyst with Edelweiss Securities said.

The company's debt equity ratio stood at 0.94 with a net debt Rs 1165 crore for the financial year ended March 2015. Around 60 percent of the debt is for lease-rent discounting which is going towards the annuity income and Rs 500 crore is against residential segment.

Brigade Group plans to launch 7.70 mn sq ft of new projects in FY 2015-16. Of this, residential launches would be about 6.10 million sq ft, Commercial Office space - 1.30 million sq ft and Hospitality would be 0.30 million sq ft.

Separately, the company has 1.9 million sft of commercial space under construction. It is also, leveraging its Orion brand and building 2 more malls across Bengaluru. In the hospitality vertical, it is planning to add 3 new hotels totaling to 652 keys in the near term. The company has an agreement in place with Holiday Inn for the development of 10 new hotels by 2020.

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